Human-Animal Embryos Coming to the World

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Take some human stem cells, stick them in a rat and…see what you come up with! That’s apparently what’s about to go down in Japan.

The Financial Times reported[1] last week that a researcher in Tokyo now has a green light to create human-animal embryos.

These will then be implanted into surrogate animals to see whether human organs can be grown in beasts like pigs and sheep.

I think it’s fair to say you and I should get used to stories like this.

It was only in April this year that a baby in Greece was born with DNA from three people. That came after a controversial IVF treatment.[2]

That’s not all. In China late last year, a ‘rogue’ scientist used the genetic editing technique called CRISPR to tweak the DNA of human embryos during in vitro fertilisation.

Are we heading into the era of The Fly?

That’s what one person called out to me on Friday. I was presenting on the investment theme of genetic editing last week.

I certainly hope we don’t see the Fly buzzing around town anytime soon.

The heading for my talk was actually ‘The End of Sex’.

That’s the direction the world is heading in — at least as far as creating babies goes.

Why?

It won’t be long before parents can not only screen for genetic diseases but personality traits and physical features as well.

I got that point after reading a book called Hacking Darwin recently.

Genetic editing need not be all about the spectre of playing God and creating monsters.

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There’s a trial underway right now that could soon lead to the end of a certain form of blindness.

What a miracle if it happens.

We may be uncertain about where all this is going. But it is happening. And it will play out in the investment markets in different ways.

Already there are genetic editing stocks that trade in America.  But it also makes for different forecasting when it comes to future government health spending.

Usually these figures extrapolate today’s billions into some number even more crushing in the future.

But what if so many of the conditions behind all this spending are eradicated?

Of course, we have no way of knowing if the end of disease is going to happen, or anytime soon.

But it’s enough to give me pause when the permabears come out of their caves and forecast low growth forever.

Medical miracles are on the horizon. That’s something to get excited about.

But there’s a second, social aspect to this development that bears watching too.

Traditional society is being upended

I mentioned the controversy surrounding fundamentalist Christian and rugby star Israel Folau in my speech last Friday.

One would think that technologies like genetic editing make the outlook even more worrying and uncertain for the traditional and conservative parts of society.

There’s going to be a lot of debate and angst around this trend.

I recall reading a book from geopolitical forecaster George Friedman.

He attributed a lot of the seeds of Islamic terrorism a decade ago to the changing status of women in Muslim society.

It suggest modern technology and societal shifts can cause more than market movements, at least.

Don’t forget a good chunk of people already believe robots and AI are going to wipe out the middle class. If the traditional family is no longer certain, the anxiety could reach an extreme. 

But what do you think? Is genetic editing something that intrigues or scares you? Perhaps you have more pressing concerns, such as low interest rates?

Let me know your thoughts via letters@profitwatch.com.au.

I draw your attention to genetic editing right now for another reason. On the ASX, there’s a bunch of biotech and ‘life science’ stocks in different stages of trial and development.

If — and it’s a big ‘if’ still — we move into a big bull market rally, these are the types of names that could really fly.

These kinds of stocks are usually pre-revenue and therefore need investors to have big risk appetites for the market to back them.

But the gains can be hot in a short amount of time.

As more stories and the potential of tech like genetic editing infiltrate the news, there’s a good chance biotech stocks could catch the eye of the herd. I’ll keep you posted.

Best wishes,

Callum Newman Signature

Callum Newman,
Editor, Profit Watch

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